The rupee on Tuesday wiped out initial losses and closed eight paise higher at 61.19 against the dollar as the government announced additional steps to curb the widening current account deficit.
Sustained capital inflows and fresh dollar sales by exporters also supported the rupee.
The rupee opened lower at 61.39 a dollar from the previous close of 61.27 at the Interbank Foreign Exchange Market and dipped to a low of 61.66 on early weakness after data late Monday showed the Index of Industrial Production contracted in June. After import duty on gold and silver were increased, the currency bounced back to a high of 60.97 before ending at 61.19, a rise of eight paise or 0.13 per cent. On Monday, it had dropped by 39 paise or 0.64 per cent.
'The government is seen taking every possible step to stem the fall in rupee and reduce the widening CAD,' said Abhishek Goenka, founder & CEO of India Forex Advisors.
'On Tuesday, it announced a hike in the import duty of gold, which will help reduce the rising current account deficit (CAD) and thereby support the sinking rupee.'
The dollar index was up by 0.14 per cent against a basket of six major currencies.'The trading range for the spot $/Re pair is expected to be within 60.70 to 61.70,' said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
Sustained capital inflows and fresh dollar sales by exporters also supported the rupee.
The rupee opened lower at 61.39 a dollar from the previous close of 61.27 at the Interbank Foreign Exchange Market and dipped to a low of 61.66 on early weakness after data late Monday showed the Index of Industrial Production contracted in June. After import duty on gold and silver were increased, the currency bounced back to a high of 60.97 before ending at 61.19, a rise of eight paise or 0.13 per cent. On Monday, it had dropped by 39 paise or 0.64 per cent.
'The government is seen taking every possible step to stem the fall in rupee and reduce the widening CAD,' said Abhishek Goenka, founder & CEO of India Forex Advisors.
'On Tuesday, it announced a hike in the import duty of gold, which will help reduce the rising current account deficit (CAD) and thereby support the sinking rupee.'
The dollar index was up by 0.14 per cent against a basket of six major currencies.'The trading range for the spot $/Re pair is expected to be within 60.70 to 61.70,' said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).